The Interactive Q&A forum online at Seeking Alpha is the latest in a series of interviews with leading ETF (exchange traded fund) providers. The interviews are questions from the community of readers at Seeking Alpha. Jeffrey L. Feldman, Founder and Chairman of XShares Group LLC is a leader in bringing innovative ETFs to market on its administrative platform. HealthShares divide the healthcare industry into "Verticles" that include companies with market caps of $100 million to $15 billion. These ETFs give positions to companies within a specific therapeutic area developing next-generation products. XShares is currently working on products based on carbon emission credits and targeted geographic portfolios within states.
The narrowness of their product line is due to the idea of having 22-25 stocks in each portfolio. In theory, risk diversification from a 22 stock portfolio is the same as that of a 220 stock portfolio. Feldman states that HealthShares are designed for long term investments but are suitable for short term trading as well. Healthcare currently represents about 16% of the U.S. economy and is expected to grow 20% in the next 8 years. HealthShares allows investors to align their investments with the technologies that will treat them in the future instead of the common pharmaceutical or biotech.
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